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Bandra Kurla Complex, Bandra (E), Mumbai: 400051
© Fortuna Capital
In this article, we will explain step-by-step how to invest in cryptocurrencies in India.
If you are starting, you need to consult an expert who can safely guide you on how to invest in cryptocurrencies in India. Various exchange platforms, brokerages and crypto funds help you manage your digital currencies.
Knowing where to invest, how to buy cryptocurrencies, where to store them and how to trade them is crucial if you hope to invest in cryptocurrencies in India for good returns in the short, medium or long term.
Cryptocurrencies are a type of digital asset issued through the blockchain that guarantees their ownership and assures the holder of the integrity of the transactions carried out on the network. This particular function or feature allows you to control the creation of new units, preventing counterfeits or copies from being made.
As digital currency does not exist in physical form, it is necessary to store it in a digital format, i.e. either a hardware wallet or a software one. In addition to keeping digital money, this software allows you to receive and send cryptocurrencies safely and cheaply. You have to be very careful with the wallet you choose and the keys to be able to access it.
Cryptocurrencies have very particular characteristics that differentiate them from traditional or fiduciary money. Digital currency transactions do not require intermediaries or depend on governments. However, a shared accounting record of each transaction in the blockchain is maintained.
So far, digital assets are not yet fully regulated in India, so they are not yet recognized as means of payment. However, some companies and people use cryptocurrencies to carry out commercial operations. However, some stores and businesses in the country accept payments with cryptos.
As cryptocurrencies are not regulated in India, there is also no financial deposit or financial guarantee fund. So if the investor loses his money due to the bankruptcy of the exchange where he invested his money, he has no guarantee of seeing it again.
To invest in cryptocurrencies in India, you must choose one or more cryptocurrencies of your choice. In addition to Bitcoin, Ethereum, Tether, Polkadot, and, there are hundreds of digital currencies to choose from. According to the criteria and investment strategy of the trader or investor.
Then, you need to choose an exchange platform or any other option that you consider safe to buy cryptocurrencies and start trading with them.
You can buy crypto in India despite it not being fully recognized by the government. Cryptos can be purchased on a crypto exchange. There are a few in India, but for beginner investors, it is advisable to choose a safe, easy-to-use, low-cost option.
Some of India’s most trusted crypto platforms are WazirX, Coinbase, Unocoin, ZebPay, CoinSwitch Kuber, and CoinDCX, which provide all those advantages to the novice investor. You then need to choose the payment option you prefer to buy cryptocurrencies.
The exchanges allow you to make bank transfers, credit/debit cards, use the UPI payment system, Mobikwik, or pay directly through a digital wallet with cryptos. Some of these platforms offer the trader the option of a peer to peer (P2P) market. Multiple sellers make offers of cryptocurrencies at a specific price. The payment method varies depending on the seller, but it is pretty flexible. In our experience, most P2P Trading happens using the UPI payment network. The fees charged by the platform vary depending on the type of cryptocurrency and the transaction amount.
To start trading and investing in cryptocurrencies in India, you need to follow a few steps. Almost all cryptocurrency exchanges have more or less the same protocol.
1. Log in to the exchange website of your choice or download the app on your phone.
2. Open an account by completing the identity requirements (KYC) requested by the platform.
3. Configure the account according to your preferences/needs.
4. Choose a cryptocurrency trading strategy. You may already have one that you use to trade other assets (stocks, bonds, commodities).
5. Choose the cryptocurrency or group of cryptos you want to buy for investment.
6. Define the quantum of funds you allocate to Trading or Buying.
7. Store cryptocurrencies.
The platform will show you the digital currencies it accepts to purchase: bitcoins, tether, native exchange tokens, stablecoins and more.
Here also note that you can buy the digital currencies directly from the exchange or through other sellers using the peer to peer option.
Cryptocurrencies, once purchased, can be stored on the exchange or in a digital wallet. When the trader or investor frequently operates in the market, he usually holds them on the exchange itself.
On the other hand, if you buy cryptocurrencies intending to store them aiming at a medium or long-term strategy, it is better to have them in a digital wallet. There are different digital wallets, some more secure, practical and accessible than others.
Digital wallets store the private keys that allow the investor to access their crypto funds. So, you can send and receive any cryptocurrency you have bought and deposited in the wallet. Some of the well-known hardware wallets are made by Trezor and Ledger.
One of the principal risks of investing in cryptocurrencies in India is the high volatility of this market. Before starting to trade crypto assets, it is advisable to understand the associated risks fully.
The truth is that all financial assets that are traded carry a high risk due to the use of leverage, manipulations and unethical trading techniques or market volatility.
But the cryptocurrency market has an even greater risk due to a series of factors that we mention below:
High volatility. Unexpected changes or “black swans” in market sentiment often cause sudden fluctuations in the price of a cryptocurrency. Recently, the value of cryptocurrencies has suffered sudden and intense falls and unexpected and very high gains.
Lack of regulation. By not having a legal basis to support them, cryptocurrencies largely depend almost exclusively on the market’s confidence. Although the regulation process is underway in nearly all countries, including India, there are still no laws regulating this type of investment and operation.
Vulnerability. Cryptocurrency trading platforms where digital currencies are stored or transactions are made susceptible to cyberattacks. No exchange platform completely avoids technical failures, cyber-attacks, or human error.
Forks / interruptions. These are two other risks involved in trading cryptocurrencies. Forks, hard or soft, are changes or misalignments in network protocols, while outages are caused by design errors, hacks, and lack of capacity.
Highly speculative market. There is very sudden price jumps (gapping) up and down in a short time due to rumours, news or events and not necessarily due to supply and demand effects.
Now that we have shown you in an introductory way how to invest in cryptocurrencies in India, we recommend that you follow the following tips.
1. Before investing in cryptocurrencies in India, analyze the market. Learn to read charts with price movements like a professional trader. A proper reading of charts shows us the performance for years, months and days of the cryptocurrency you plan to invest on.
2. Seek advice from a cryptocurrency expert to help you better understand this investment area. Professional advice saves us unnecessary money losses and helps us better navigate the investment we are making.
3. Adopt a proven strategy or a combination of strategies to trade with a higher guarantee of success. Here again, the teachings of an expert are crucial to advance more quickly in this type of business.
4. Use an efficient trading style. To choose it, you must consider the technical aspects and the type of risk appetite. Now that you know how to invest in cryptocurrencies in India, you have a better judgment to start trading prudently in this promising market.
This guide to investing in cryptocurrencies and other digital assets will help you successfully enter the crypto space and progressively develop the ability to understand this growing global market better.
The first thing we must say is that cryptocurrencies are the new form of money. Digital money entered the scene in 2009 with the launch of Bitcoin (BTC). This was the first cryptocurrency created by someone under the pseudonym Satoshi Nakamoto.
Since the dawn of the crypto age, the price of cryptos, despite the characteristic ups and downs due to their volatility, have gone up substantially over a 10-year horizon. Cryptos, at this point, represent an unavoidable investment option.
Among the well-known cryptocurrencies of the almost 1700 projects that currently exist are Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Tether (USDT), Cardano (ADA), Solana (SOL), Ripple (XRP), Terra, Dogecoin (DOGE) and Shiba Inu.
Cryptocurrencies are currently considered an essential asset in the investment portfolios of many investors. Big and small investors are betting on the success of blockchain technology. Its multiple uses are entirely changing the financial system of the countries.
For about three years, investments in cryptocurrencies have grown at the level of oil, gold and any other stock market asset. Today, the crypto market is already well over $3 trillion, according to data from Statista. This puts digital assets on a par with Apple, Google, Meta, Amazon, and every other tech giant.
So now is the time to jump on this fast-moving bandwagon of progress. But, to invest, you need first to learn how to do it to avoid costly mistakes.
Basic Crypto Investment Methods
To start investing in Crypto, you first need to adopt one of the four investment methods.
1. Buy cryptocurrencies
Through centralized cryptocurrency exchanges, P2P shopping sites, decentralized exchanges, and ATMs, you can do this. You will need to get your KYC done, then you will need to link your bank account to your crypto exchange, and you can get started. This is the easiest and most recommended method to invest in cryptocurrencies as long as you take the proper precautions since the purchase is direct.
To do this, you must create an account with a crypto exchange. These are some of the biggest in the world: Binance, Coinbase, Gemini & Kraken . In India, you can look at WazirX & CoinDCX Although there are many more that offer excellent services, security and important returns for your investments.
2. Invest as you would in a SIP
The crypto asset space is more volatile compared to the stock market and the mutual fund space. Therefore, it makes a lot of sense to make monthly purchases of your favourite basket of your Crypto digital assets. This would allow you to average out your price and ride out the volatilities in the short run, which could significantly help you improve your long term returns.
3. Invest via a fund
Investing in a fund is good if you want a nuanced entry into the crypto asset space. Funds perform their due diligence work, filter assets, and have early access to deals that others may not have. These can help in generating good returns for your capital. A fund allows you to be hands-off and allows experts to focus on their expertise in generating returns via their understanding of the crypto space and fund management insights. /
Crypto is here to stay and your consistency and thoughtfulness of choices will play a very important role in the returns you will generate. With over 17,000 cryptocurrencies available, it is imperative to both know which ones to buy, when to buy and also how to buy and secure these assets. Start with a small amount to build your confidence in the space and you could be on your way to generating generational wealth
Address
Fortuna Capital, Level 7,
The Capital, Plot C – 70, G Block,
Bandra Kurla Complex, Bandra (E), Mumbai: 400051
© Fortuna Capital